Heading in the right direction on the gender pay gap

More still needs to be done, but the pensions industry’s gender pay is now narrowing

Jonathan Stapleton
clock • 2 min read
Heading in the right direction on the gender pay gap

The area of gender pay gap reporting has been a complex one ever since it became a legal requirement in April 2017.

Only those employers with more than 250 staff on the so-called ‘snapshot' date are required to submit a report. Added to this, while the rules require employers to provide pay gap information on a mean and median basis, as well as bonus pay gaps on the same bases and the proportion of men and women in each pay quartile, they do not necessarily show if men and women are paid different rates for doing the same job.

Certain factors can also influence the gap significantly, such as the number of women in the most senior positions in an organisation and proportion in the least-paid positions.

The figures, however, do serve as a useful indicator of the direction of travel - and can act as a guide to the progress being made across different sectors.

Since the reporting began, Professional Pensions deputy editor James Phillips has been assessing the gender pay gap of the pensions industry - this year, looking at some 124 organisations involved in scheme provision, administration, investment, advice and policy.

This year's analysis - covering reports at the snapshot dates of 31 March or 5 April 2020 that had to be filed by 5 October - found that three in five organisations had recorded an improvement in their mean gender gap since the previous year. On average, the mean gap reduced by 90 basis points to 23.1% - meaning that women in the industry are paid 76.9p for every £1 earned by men.

The pensions industry has now recorded improvements in its gender pay gap every year since mandatory reports were introduced but there remains work to be done to improve this further, especially in those parts of the industry that have much higher pay gaps than others.

For instance, investment management firms have an average mean pay gap of 28.8% compared to the gap at law firms of 17.5% and the gap at government bodies of 10.5%. Some individual organisations working in the pensions space have pay gaps as high as 53.1%.

While it is clearly a challenging area, progress will continue to be made, albeit only if the industry doubles-down on the efforts it has already made.

Jonathan Stapleton is editor of Professional Pensions

 

Read more: 

Slashing the gender pay gap: A third year of progress

The 2020 gender pay gap data in full

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